During a siege coins and precious metal invariably go into hiding, in secret hoards, and cities under siege have often turned to a form of fiat money, usually paper money.
In 1574 the Spanish laid siege to the city of Leyden in the Lowlands. The city needed all the metal it could muster to manufacture arms, and even collected the metallic coinage to contribute to the effort. The burgomaster of Leyden issued small pieces of paper to take the place of coinage. These scraps of paper money predate by nearly a century the permanent introduction of paper money in Europe.
Several cities issued siege notes during the wars of the French Revolution and Napoleon. In 1793 the royalists in Lyons, France, revolted and took control of the city. The republican forces laid siege. The royalists printed crude notes on cardboard with the expression “The Siege of Lyon” and distributed them as money. In the same year Austria laid siege to the German town of Mainz, then under French control. The French authorities printed up a paper currency with the expression, “Siege de Mayence Mai 1793 2e de la Rep. France.” In 1796 the city of Mantua in Italy issued a siege currency when the city came under siege by Napoleon. Colburg, Prussia, issued siege currency in 1807 under the pressure of a Napoleonic siege. Also, several Italian cities issued siege currencies during the uprisings of 1848.
In 1884 the British government dispatched General Charles George Gordon to the Sudan to evacuate Egyptian forces from Khartoum, which was about to be overrun by Sudanese rebels. Gordon reached Khartoum in February 1884 and a month later the rebels laid siege to the city. The siege lasted until 26 January 1885 when the rebels took the city and killed the defenders, including Gordon. Gordon’s death after a colorful career and heroic struggle made him a martyr, and the siege of Khartoum became one memorable episode in the history of the British Empire, the stuff of Hollywood movies.
One of the less well-known aspects of the siege of Khartoum was the issuance of a siege paper money. On his arrival, Gordon found the treasury of Khartoum empty, and within a few weeks Gordon issued emergency notes. Each note bore Gordon’s signature. The first 50,000 notes he signed by hand, and the rest bore his printed signature. Gordon’s signature accompanied a statement on each note saying that he (Gordon) was “personally responsible for the liquidation, and anyone can bring action against me, in my individual capacity, to recover the money.” The total value of the notes was approximately 168,500 Egyptian pounds. About 2,000 specimens of these notes have survived, mostly in the hands of collectors.
The exigencies of sieges have forced governments to experiment with fiat money, helping to make way for the ascendancy of fiat paper money in the twentieth century.
See also:Inconvertible Paper Money,Pontiac’s Bark Money
Beresiner, Yasha. 1977. Paper Money.
Weatherford, Jack. 1997. The History of Money.